Public Bill Committee

[Mr Jim Hood in the Chair]
Written evidence to be reported to the House
PS 16 UK Mail

Clause 2

Gordon Banks: I beg to move amendment 16, in clause 2, page 1, line 16, leave out subsection (2) and insert—

Jimmy Hood: With this it will be convenient to discuss the following:
Amendment 17, in clause 2, page 1, line 16, leave out from ‘after’ to end of clause and add
Amendment 18, in clause 2, page 1, line 16, leave out from ‘after’ to end of clause and insert
Amendment 15, in clause 2, page 1, line 17, leave out ‘a report’ and insert

Gordon Banks: With amendment 16, I am asking the Committee to agree to leave out subsection (2) of the clause and replace it with the words on the amendment paper in the name of my hon. Friend the Member for Llanelli and myself. I am sure that if we stray from that during our deliberations, you will use your good offices to keep us in check, Mr Hood. I hope that our deliberations today meet with greater approval from the hon. Member for Braintree than our efforts did on Tuesday. He made a contribution about that via a tweet that merits inclusion in Hansard, so I shall read it out for the record:
“Sitting in v v dull Postal Services Bill Committee.”
Shock, horror! Well, it is not my fault that the hon. Gentleman thinks that his hon. Friend the Minister’s Bill is so dull.

Edward Davey: I don’t think it was the Bill.

Gordon Banks: The Minister says from a sedentary position that he does not think it was the Bill. It could not possibly be the contributions from the Committee that were dull, because I am sure that they were not. We had references to Sebastian Vettel and rally driving in Scotland and an entertaining debate about the ownership of Deutsche Post.

Jimmy Hood: Order. I am sure that the contribution on Twitter was quite amusing, but it is not relevant to the amendment. I invite the hon. Gentleman to keep that in mind.

Gordon Banks: Thank you, Mr Hood. I was trying to stress that I did not think that the Committee was dull.
The objectives of amendment 16 are many and varied, and I think that it will be useful if I take the Committee through them one by one. First, proposed new subsection (2)(a) would secure the placing of at least one representative from those directly employed by the privatised Royal Mail or its successors on the board of the new company. I am sure that the Minister will agree with the sentiment that that would be a beneficial step for the new company and that it must be secured in the negotiating stage with the prospective bidders. If the amendment was accepted, it would become a requirement in law and it would be necessary for the agreement to be effective immediately in the construction of the new management set-up. It is appropriate that the Secretary of State should have the power and responsibility to police and approve such a contract and satisfy himself that the aims and objectives of the legislation have been met to allow him to comply with his other responsibilities under the amendment.
Including a representative from the work force directly employed by Royal Mail or its successors would provide an opportunity for a close working relationship at board level, which would be a real advantage to the company. From the employees’ point of view, it would provide an opportunity to ensure that their concerns and suggestions were raised, and that they had input into the company at the highest level. It would be a natural avenue for developing a relationship between management and work force in a way that would only strengthen the company in what we have been told by the Government and the witnesses in our evidence sessions will be an ever-challenging set of circumstances. Employees would be able to have greater faith in the management decisions of the new company as it moved forward into that uncharted territory if such an arrangement was in place and they could be part of the decision-making process.
I would expect a clear set of regulations to be worked out by the company to ensure that there was a precise set of channels to allow a two-way flow of information, to and from the work force and the board, through the directly employed representative. On the employer side, such an arrangement would be a sign of faith that the work force are one of the biggest assets that a company can have—the other, of course, being the customer. Furthermore, my hon. Friends and I would not object to the appointment of a customer representative on the board. Perhaps the Minister will think about that suggestion and draft a Government amendment to incorporate such a proposal. We will wait with bated breath.
If such representation existed, the board would be able to make quicker and clearer decisions. As Mr Brydon, the chairman of Royal Mail, said in his evidence:
“You have to be flexible and quick.”––[Official Report, Postal Services Public Bill Committee, 9 November 2010; c. 15, Q32.]
The amendment would allow quickness and flexibility, which would be lost if such representation did not exist in the company, which has had several problems in the liaisons between management and work force in the past. I am sure that the Minister and the board of the new business agree that good working relationships are vital. They will be extremely important in the new business so I firmly believe that the amendment would be a great step forward. It would compel the management to invest and show its faith in the work force. My hon. Friends and, indeed, the work force would expect the representative, if the amendment were accepted, to have the same power and responsibilities of other board representatives to ensure equal representation. It would not be acceptable to have anything less.
My hon. Friend the Member for Llanelli and I omitted from the amendment the process by which such a representative would be appointed, so I look forward to that being debated in our proceedings, when I shall voice my preference for such an appointment to be in control of the work force in much the same way as the other board appointments will be in the control of the management.

Edward Davey: The hon. Gentleman is making an interesting speech, and I am paying careful attention to it. Will he explain why the previous Government did not put an employee representative on the board?

Gordon Banks: We are dealing with a Bill that will sell off 100% of Royal Mail, irrespective of the Minister’s manifesto ambitions. That is fundamentally different from the position of Royal Mail in the past.

Gregg McClymont: We all owned the Royal Mail, so it was probably less important to have an employee representative on the board.

Gordon Banks: That is a valid point. My hon. Friend has reiterated the strength that Labour Members believe comes from public ownership.

Edward Davey: I want to explore the relevance of having an employee on the board just because the organisation is in private not public ownership. The previous Government, particularly through the Postal Services Act 2000, made it clear that Royal Mail Holdings operated at arm’s length from the Government and that they would not intervene. Indeed, the Government did not intervene in the relationships between the work force and the management. It would have been appropriate, therefore, given the hon. Gentleman’s argument, to have an employee representative on the board under the previous Government. Why was that not the case?

Gordon Banks: We are debating the Government’s Bill, not what happened in the past. In evidence, Richard Hooper talked about employee representation on Post Danmark and how successful that was. We have heard from the Committee about international competition and how we should learn from what is happening internationally, so we should learn about what is happening internationally on this matter, too.
The amendment would not restrict representation on the board to only one representative, but it would provide for “at least one” directly employed representative. If the management and, indeed, the work force saw real added value in increasing the number from one, nothing in the amendment would prevent that from occurring. However, we always want to provide flexibility and such matters should be for the whole organisation to determine when the work load of the first representative has been evaluated.
Under the amendment subsection (2)(b) would provide that
“the headquarters of the new body will be located in the United Kingdom”.
I am sure that some hon. Members, and perhaps even the Minister, think that that might be a foregone conclusion and that the provision is unnecessary, but let us just put it in the Bill, in case Royal Mail is purchased by an overseas company that wants to incorporate the headquarters of the newly privatised Royal Mail into, say, its own HQ elsewhere in Europe or, indeed, further afield.
The amendment in essence states that Royal Mail is a UK business. The clue may be in our interpretation of the word “royal,” but as the Queen is also the head of many Commonwealth countries the amendment would ensure that the location of headquarters would remain in the UK.

Michael Weir: It seems to me that the amendment provides only that the headquarters should be in the UK. It does not say that the administration of Royal Mail should be carried out in the UK. There is a danger, even under the amendment—and I understand where the hon. Gentleman is coming from—that we would get a plate somewhere in London or Edinburgh, but nothing else, as has happened with some banks.

Gordon Banks: That may be a very valid point. I hope that the Committee will take the amendment in the spirit in which it is intended. We would like not just the HQ but also the operational process to be included. I shall come on to why I think that is important for the work force.

David Wright: I suggest that the Government could accept the amendment and then improve it on Report. That would be an excellent way forward. It would give the Government the opportunity to support the principle of the headquarters being in the UK. Then the Bill could be tidied up in accordance with what the hon. Member for Angus has pointed out.

Gordon Banks: I am for ever grateful to my hon. Friend for his interventions. As I said on Tuesday I want to be helpful to the Minister, and constructive. I think that the amendment will be helpful to him, but I look to him perhaps to be helpful in return and do as my hon. Friend suggested, tabling an extended amendment on Report, if the Committee feels that my amendment does not go far enough.
I accept that we live in an ever-shrinking business world and that many businesses move their locations about freely, to suit their needs. However, my hon. Friends and I see the need for a solution based firmly in the UK, albeit within a competitive European and, indeed, worldwide market. That touches on the point that the hon. Member for Angus made. I want the operation to be based in the UK.
The amendment would protect the UK integrity of Royal Mail and would bind any successful bidder to recognise the importance of the location of the HQ as an integral part of the way forward. I believe that the work force and customers alike could take strength from the amendment, and I feel sure that the Minister will want to protect the integrity and history of Royal Mail as a UK institution by agreeing to it and, as we have suggested, possibly even improving it.
It has already been said in Committee, but I will repeat, that the Opposition are inherently against the Government’s objectives in selling the Royal Mail. However, if it happens my hon. Friends and I are committed to keeping the essence of the business in the UK. We believe that the amendment would go some way to doing that.
Additionally, an operating HQ in the UK would make things easier and less demanding for the executives managing the business—who, I hope the Minister agrees, may need our help in establishing the correct support and solutions in relation to the issues we are considering. It is also preferable to retain management jobs in this country, to ensure that the work force can relate appropriately to those in the relevant positions, and so that all workers in the business can have available to them a ladder of development that does not rely on their eventual relocation overseas, with all the difficulties that that would entail.
I have tried to expand on the amendment and on our intentions, which, as the hon. Member for Angus suggested, are perhaps somewhat deeper than the words themselves provide for. If the Minister does not accept the amendment, he is effectively saying to the work force and the UK public that he does not care whether Royal Mail retains a UK identity. I am sure he does not want to create that impression, or indeed the difficulties that may flow from it.
Paragraph (c) recognises that future owners might, if they so desire, move the HQ out of the UK, once it has been established in the UK as a result of our excellent paragraph (b). The amendment simply restricts the ability of the business to do that without the approval of the Secretary of State.

Edward Davey: When the previous Government sold British Energy Group plc, what provision did they make to ensure that the headquarters remained in the UK? Will the hon. Gentleman remind me?

Gordon Banks: The Minister keeps referring to the past when we should be looking to the future. We are scrutinising the Bill to make it better. We are not in a position in Committee to make past Bills better.

Edward Davey: Last year the previous Government sold off a British company and its headquarters are now abroad. I think the hon. Gentleman needs to be consistent, at least over a year’s passage of time.

Gordon Banks: The Minister should not talk about consistency, because a few months ago he stood on a platform to keep 51% of Royal Mail in employee and Government control. As we will see, as we debate further, there will be a big fat zero owned by the Government as a result of the Bill.

Graeme Morrice: The Minister’s talk of consistency is like the kettle calling the pot black. From the Minister’s various interventions, does my hon. Friend get the impression that he is not particularly fussed whether the headquarters of Royal Mail remain in the UK?

Gordon Banks: I will allow the Committee to arrive at its own conclusions. The Minister seems intent on trying to prove that there is a precedent for not having the headquarters in the UK. I urge him to listen to contributions to the debate, then go away and ensure that Royal Mail—if and when it is sold off into private hands—retains its HQ in the UK for all the reasons that I have mentioned, including management and work force development.

Damian Collins: The Minister referred to the sale of British Energy, which affects the Dungeness nuclear power station in my constituency. Does the hon. Gentleman believe that there is something wrong with the way that EDF is running that business that should be of interest to my constituents? Should it be a lesson to us when considering the Royal Mail sale?

Gordon Banks: I would have thought that the hon. Gentleman could make his own arguments about where the HQ of certain businesses operating in his constituency should be. However, we must not deviate from trying to improve the Bill. We are trying to improve the complexities and working arrangements for Royal Mail as we go forward into what proposes to be a very private world for Royal Mail in future.
I am surprised that no one has intervened on whether there would be legal difficulties relating to the amendment. How will the Government be able to tie a successful bidder into an extended inter-business agreement with the Post Office? That is seen as instrumental for the survival of the Post Office. It is an objective that the Minister himself holds. If one can be done, I do not see how the other cannot be done. If none can be done—if we cannot have a long-lasting IBA and cannot have the HQ in the UK, for legal reasons—perhaps the Minister will tell us why.
If the Secretary of State agreed such a plan to allow the business headquarters to relocate overseas, it would be possible for Parliament to question him on the basis of that decision and hold him accountable. That would create a level of transparency and accountability lacking without such an amendment. Indeed, as in paragraph (b), if the Minister thinks that that would never occur, there is little to be lost from his agreeing to the amendment, just as an insurance policy.
Approval of the Committee for the proposed new subsection to clause 2, in its entirety, would be necessary for paragraph (c) to be activated, but if the Minister feels unable to accept all the excellent suggestions put forward in amendment 16, I encourage him to go away, as has been suggested, and think about the bits that he can relate to. I am sure that there must be many and I am sure, as the debate goes on, that there will be even more. However, I encourage him to go away and bring back Government amendments on those areas to allow me, and my hon. Friends, to support him.
On paragraph (d), it is vital that such a consultation exercise with those involved in the provision of postal services in the UK be undertaken where the details of the proposal can be made clearly to those with an interest in the provision of services, and in a way that allows a valuable dialogue to be established in the consultation process. I do not want to be prescriptive here as to who “all” is, and I want to provide the Minister with a degree of that word flexibility that everybody is talking about, but I have no doubt that the Minister and his officials would be able to draw together an appropriate list of consultees, ranging from employee groups to sub-postmasters and business provision partners. That consultation would allow all those vital sectors of the organisation, and its service provision, to comment on the proposals of any such transfer, and it would be expected that all possible details not covered by commercial confidentiality would be made available to the consultees, as that would add value to the consultation process.

Edward Davey: Will the hon. Gentleman explain which part of Richard Hooper’s consultation, from both 2008 and the update, he thinks was lacking?

Gordon Banks: We are not talking about Richard Hooper’s consultation; we are talking about the Bill. We are talking about how to improve the Bill. We are talking about the Bill and about consulting on the offer that the Secretary of State decides he wants to accept for Royal Mail. That is what we are talking about. We are trying to improve the transparency of the Bill to allow everybody to have faith in the Government’s actions, and I think that the Minister should embrace that.
The consultation process would result in the Secretary of State having a clear understanding of the views of the consultees on the proposals. His response to the consultation would allow him to absorb the areas of improvement that may come from the consultation in such a way that empowers him, if necessary, to return to improve, or alter, the disposal arrangements with the preferred successful bidder. I accept that that would become a negotiating matter, but the Secretary of State would be empowered by the strength of the consultation exercise. Indeed, the preferred bidder would also be able to judge the strength of issues coming from the process—a win-win situation. The content of the formal response would, of course, be within the powers of the Secretary of State to determine—again, an example of my acknowledgment of the need for flexibility. I would, however, expect any Secretary of State to take detailed cognisance of the submissions made and have their contributions evaluated fairly before making any response.
After the completion of that process, it would be necessary for the Secretary of State to instruct that a ballot of all employees of the affected Royal Mail company be held on the issue of disposal. That is covered in paragraph (e) of the amendment. It would be necessary for the Secretary of State to ensure a simple majority of the work force to enable the disposal to take place. That restriction on the Secretary of State would be beneficial for the bidder because, if the required majority was achieved, the preferred bidder would be very secure in the knowledge that a majority of the work force was in favour of the agreement that had been reached between them and the Secretary of State. I hope my hon. Friends agree that this would be hugely important to the well-being of relationships within the new company and would be a sound platform for the business to develop in the years ahead.

Michael Weir: I understand the hon. Gentleman’s argument and I support him to a great extent, but could he explain the slight contradiction between paragraphs (d) and (e)? Paragraph (d) asks for a consultation with all those engaged in the provision of postal services, which is much wider than the workers in Royal Mail itself. I understand that his argument may be that the workers in Royal Mail are the ones who are directly affected by a transfer, but given that Post Office Ltd has been split off from Royal Mail, sub-postmasters and consumers will also be directly affected. Has he thought of any way, other than the consultation, that their views can be taken into account before a sale to a specified bidder takes place?

Gordon Banks: The hon. Gentleman has made an interesting point, which I am sure the Minister has noted. He may come back on Report with just such an amendment. The aim of all this redrafting is to achieve a level of consultation and approval for the selling off of Royal Mail that does not exist at present. Our amendments may not be perfect and the Minister and his officials may well be able to improve on them, but there is a process for doing so and I look forward to that debate developing and the Minister coming back with some suggestions of his own.
As I have employed people for many years, I know how vital it is to have a contented work force. As I have said on many occasions and as I will no doubt say again in this Committee, any business has two main assets: its customers and its work force. In an organisation such as Royal Mail the work force are also, partially, the customers so there is an even greater need to have their agreement on such a fundamental change to a British institution. I make that comment in relation to what the hon. Member for Angus just said. In the ballot proposed in the amendment there would be some customer representation because everybody who works for Royal Mail is a customer too.
Of course, there is a possibility that the work force could reject the proposals put forward as a result of the Secretary of State’s deliberations with potential bidders, but if that were the case I would have to conclude that it was not a very good deal for either the business or the employees. In such a case I am sure that the Secretary of State would welcome the arguments made in such a process and use those to his best interests in the future. He could renegotiate and revisit the consultation exercise and work force vote. That would be his prerogative, but it would have to be done in a way that was constructive and showed improvements on any previously rejected proposals; otherwise he would be wasting everyone’s time and my hon. Friends and I do not believe that this or any future Secretary of State would want to embark on such posturing.
However, like Mr Sibbick, the secretary of the Mail Competition Forum, who gave evidence to the Committee, I would like to be optimistic. So I will be optimistic on behalf of the Secretary of State and assume that his negotiating skills, consultation abilities and balloting skills have got him to a position where he has an option that has been positively consulted upon and has secured a work force majority. At this point paragraph (f) would be engaged and the Secretary of State would have to present to Parliament a Bill that conferred on him the power to dispose of the business in relation to the bid on which he has already consulted and secured work force approval.
I suggest that the Minister should see that hurdle as little or no obstacle, because, if all the preceding points have been secured, the approval of Parliament should be a follow-on step in the process. That would allow parliamentarians to comment and vote on the proposals, which would be a just and appropriate part of the process, and would add a further level of transparency and authority to any sale, which is sadly lacking from the Bill as it stands.
The Bill states that the Secretary of State only needs to
“lay before Parliament a report on the proposed disposal.”
When the Minister gave evidence to the Committee last week, he was challenged by my hon. Friend the Member for Telford on the format of that report. If the Minister had been more forthcoming in his responses, we might not be debating the matter now. My hon. Friend and I are reasonable men, and we would have welcomed the opportunity to spend time discussing other aspects of the Bill, but the Minister’s responses were not very helpful. On the report as it stands in the Bill, he said that
“in clause 2, we are putting a requirement on ourselves to report back to Parliament. No doubt, when we debate clause 2, you will want us to do far more than that. I can just imagine the amendments that you will put forward.”––[Official Report, Postal Services Public Bill Committee, 11 November 2010; c. 126, Q250.]
I hope my hon. Friends and I have not disappointed the Minister too much, and that we have met his expectations on the hoops that he feels we want him to jump through. [Interruption.] The Minister says from a sedentary position that we “surpass them,” which I take as some degree of compliment.
This would have been much easier if the Minister had been more conciliatory to my hon. Friend the Member for Telford. When pressed on how the report would be laid, the Minister referred my hon. Friend to clause 2. As we all know, the clause states only that a report will be laid, and not how it will be laid. My hon. Friend gave the Minister a way out when he asked—in simple but poignant words—whether the Minister intended just
“to pop it in the Vote Office?”
The Minister would still not be drawn, replying to another question from my hon. Friend that
“there will be a Command Paper”.––[Official Report, Postal Services Public Bill Committee, 11 November 2010; c. 127, Q252-253.]
I looked up Command Paper on Wikipedia, that well-trusted research base:
“A command paper is a document issued by the British government and presented to Parliament. White papers, green papers, treaties, reports from Royal Commissions and various government bodies can all be released as command papers, so-called because they are presented to Parliament formally ‘By Her Majesty’s Command’.”
The Committee is, therefore, no further forward in understanding the Government’s intentions. I am sure that the Minister understands the need for my hon. Friends and me to press him on the amendment.
The amendment would require a Bill that should include
“all aspects of the proposed transfer”
to allow parliamentarians to arrive at an informed decision on the future of Royal Mail. Wikipedia tells me that Royal Mail can trace
“its history back to 1516, when Henry VIII established a ‘Master of the Posts’, a post which eventually evolved into the office of the Postmaster General.”
Interestingly, the service was first made available to the public by Charles I in 1635, and postage charges were first introduced by Charles II in 1660. That is the end of the history lesson for now, except to say:
“Between 1719 and 1763, Ralph Allen, Postmaster at Bath, signed a series of contracts with the post office to develop and expand Britain’s postal network. He organised mail coaches which were provided by both Wilson & Company of London and Williams & Company of Bath.”
That history should not be consigned to the dustbin without parliamentary agreement on the deal that takes it out of public ownership. The Bill does not allow for that, so I believe, as do my hon. Friends, that paragraph (f) of the amendment would be supported by Royal Mail’s founders if they were with us today in Committee.
Paragraph (f)(ii) would require the Secretary of State to outline how he proposes to enshrine the universal service provision in law regarding the new provider and the new Bill that would empower him to dispose of Royal Mail. The deal for such a disposal must be made after consultation, votes of all affected employees of Royal Mail, and votes in Parliament.
There has been much said, and there will be more, about the universal service provision—it is dear to my heart for a number of reasons. My constituency has many rural parts—indeed, I have lived in some of those locations, which make part of my constituency look like a metropolis. I can understand, therefore, any new provider’s business argument to reduce the universal service obligations. However, for constituents who live in rural parts—in some cases in absolute isolation, as the hon. Member for Angus mentioned in the previous sitting—the service must not be allowed to be eroded.
I am sure that some hon. Members will agree that, for many households, the postal service is a lifeline, and that universal should mean just that—universal.

Michael Weir: I agree, but I emphasise another point that I made earlier in the week: we should not get hung up on the matter of individual mail, because the importance of the universal service relates to small and medium-sized businesses in rural areas, which cannot operate without a dedicated mail service.

Gordon Banks: The hon. Gentleman has made a valid point and I shall come to businesses—I hope that he did not expect me to miss them out of my contribution.

Michael Weir: Just in case.

Gordon Banks: Why should I get a six-day service when I am in London on parliamentary business, but a lesser service when I return home to Scotland, just because it is a bit more isolated? Why should people—or businesses—who want to contact me by post have to pay a premium because I live a bit further away than somebody else? It simply is not fair, and the Government must guarantee the universal service provision. My hon. Friend and I had in mind the best interests of families up and down the UK when we tabled the amendment. At the same time, we were considering the Minister’s position and we thought that he needed a little help.
As the hon. Member for Angus has suggested, we need to consider the impact of the universal service provision on UK businesses. In evidence to Committee, I highlighted how many small businesses rely on the post for a range of services, including payments. Many also receive purchase orders, legal documents, architectural drawings, products to sell and products that they have bought, and myriad other things. Why should such businesses in my constituency, or in that of the hon. Member for Angus, get a lesser service than businesses in city centres? I do not think that they should—neither, I am sure, do the hon. Gentleman or my hon. Friends. To protect households and businesses, the universal service provision, as currently enjoyed, must be secured in a Bill that would empower the Secretary of State to sell off the best china—the amendment proposes just that.
Finally, paragraph (f)(iii) of the amendment would require the Secretary of State to include in such a Bill a report on the progress of Royal Mail’s modernisation at the time of the proposed transfer. That measure is necessary because it will be vital for parliamentarians to understand the level of progress that has been made, to ensure that they are able fully to evaluate the benefits, or otherwise, of any deal that the Secretary of State proposes.
What will be the value of the unspent budget allocated to the modernisation process at that point in time—if there is a balance, depending on when the sale proceeds and how future modernisation is funded, assuming that the business is not sold by the end of this modernisation period? We have tried to draw the Minister on that. He has not yet bitten the hook, but we will continue to try to get him to comment on that—not to have him wriggle on our line, but so that we may understand his intentions for future modernisation should Royal Mail not be sold before the end of this modernisation process. It is important to be able to evaluate that, which will empower parliamentarians with the knowledge of how much progress has been made, and at what cost. It is also important to establish the Secretary of State’s vision for the unspent modernisation budget, if there is one. Does he see it returning to the Treasury, where it would be out of Royal Mail’s control, or does he intend to donate it to the successful bidder? That is a vital question, but the Bill does not require it to be addressed. Our amendments would prompt the dispersal of such knowledge.
There are serious issues that require the Government’s attention, and by accepting the amendment the Minister could ensure that such matters receive not only Government attention, but parliamentary attention. That would provide him and the Secretary of State with a level of transparency that I am sure they are anxious to achieve in any deal.
Pulling all that together, amendment 16 is large and important. It is important because it delivers a level of security, checks and balances, and transparency that the Bill fails to provide. As it stands, clause 2 does not do what it should say on the tin. In the evidence session last week, the Minister was found wanting in his response to my hon. Friend the Member for Telford. It is with those reasons in mind that I have delayed the Committee on this matter for so long this morning. I look forward to hearing further contributions on this amendment. If the Minister feels that the conditions laid out in the amendment are too onerous, I will offer him, in the spirit of giving, three alternatives to consider.

Edward Davey: It is Christmas already.

Gordon Banks: I move on to amendments 17, 18 and 15, which are in my name and that of my hon. Friend the Member for Llanelli. First, amendments 17 and 18 call for either a super-affirmative motion or an affirmative motion before the Bill, or the order to which it refers, becomes lawful. As there are a number of new MPs on this Committee, it might be useful if I explain how those work. Older heads, such as the Minister, can rest their ears at this point.
First, if anyone is keen to read about it in more detail, the super-affirmative resolution procedure is defined by section 18 of the Legislative and Regulatory Reform Act 2006. In a nutshell, the procedure outlines a 60-day period following the laying of an order by the Minister, during which the relevant parliamentary Committees may report on the draft order, or either House may make a resolution on it. The Minister would have to have regard to any such reports or resolutions, as well as any other representations made on the draft order. Once the 60-day period has expired, if the Minister wished to make the order with no changes, he would have to lay a statement before the House. He could then make an order in the terms of the draft, assuming that it had been approved by a resolution of each House of Parliament. Alternatively, if the Minister wished to make an order that is a revised version of the draft order he has laid, he would have to lay before Parliament a revised draft of the order and a statement that specifically sets out the proposed revision. If that is approved by the aforesaid resolution of each House of Parliament, he may then make the order. If Members would like an example of where such a super-affirmative motion could be used, they could look at sections 17 and 18 of the Digital Economy Act 2010.
Members will perhaps be relieved to know that the super-affirmative motion is the more complex of the two, and that an affirmative resolution procedure is less complicated. In this matter, the Minister may make an order in terms of the draft only if the draft order has been approved by a resolution of each House of Parliament after 40 days, not 60 days, of the order being laid before Parliament. Again, if Members wish to see an example of this procedure in action, they can look at section 47 of the Higher Education Act 2004.
Turning to amendment 15, if the Minister wished to dispense with these procedures too, as I expect he might, the option would remain for the Secretary of State to lay a Bill before Parliament, which is not to be confused with the Bill referred to in amendment 16.
The amendments are important as they would put a duty on the Government to come to Parliament and seek the Houses’ permission to sell the business based on the deal on the table. In my view, and that of the Opposition, the duty to report back to Parliament is vital. I am sure that the Minister will agree that I have been incredibly gracious and flexible in offering him three—indeed four—alternatives to the Bill as it stands, or three alternatives, should he find the sacrifices in amendment 16 too demanding. I am sure that the Minister will also agree that any decision to sell off part of such an historic and valued organisation as Royal Mail must, at a minimum, be subject to a vote by the people’s representatives on the value of the deal on the table.
I do not want to repeat what I have said earlier, but I want to stress to the Minister and the Committee the importance of bringing any proposed decision to sell to Parliament for approval. As the Bill stands, the only duty on the Secretary of State after he decides to sell is to lay a Command Paper in the Vote Office, and referred representation about what that may mean. Surely we need a little more detail from the Minister and a larger commitment from the Government to report adequately to Parliament on this vital issue.
To conclude, I am trying to help the Minister by offering four alternatives that would allow him to engage Parliament. The Minister has sat on the Back Benches long enough to appreciate that the authority of Parliament should be absolute, so it is my hope that he will consider the amendments seriously in his deliberations with officials.
In another nutshell, when the criticism rains down on the Minister’s head that not enough consultation has taken place and that the proposals have been rushed through Parliament, I hope that he will think back to today and remember that he had the opportunity—indeed, four opportunities—to ensure that Parliament has been properly consulted on the decision to sell off part of the national institution that we all know as Royal Mail.

Michael Weir: I want to make a brief speech on the clause and on amendment 16. I listened carefully to the hon. Gentleman, and I have a great deal of sympathy for his argument even though, as I pointed out in one or two interventions, I see some difficulties with it.
The main difficulty, particularly with paragraph (a), is that we do not know the final structure of any privatised company, should that disaster come about. The Bill, as it stands, allows for 90% of Royal Mail to be sold off, with 10% of shares going to the work force. If Royal Mail is sold off by a public offering, it may have many shareholders, in which case the 10% shareholding of the employees could be significant. If Royal Mail is, however, sold off to, for example, Deutsche Post or TNT, which would then control 90% of the shares, the 10% share held by the work force would not be that significant. The final structure will depend on how many members of the board should be from the work force. While I fully appreciate the amendment and would agree that it is important that a representative of the work force is on the board, the number and how that is done will depend on the final structure of any privatised company—although we hope that it is not privatised, but that is an argument for later.
I was interested in what the hon. Member for Ochil and South Perthshire had to say about the headquarters of the company. Again, that is something that I have a great deal of sympathy for. In Scotland, we have experience of companies that have been taken over and of promises being made that the headquarters will remain in Edinburgh. What happens, however, is that there is a brass plaque on a plate somewhere in an office in Edinburgh and real control is exercised elsewhere. That has been a problem of the Scottish economy for many years. I am concerned that the same thing might happen here, especially if there is a sale to a foreign company, which might have its main business elsewhere.
The Minister intervened on the hon. Member for Ochil and South Perthshire to ask about British Energy. Now, as someone whose hands are clean and who has never voted for the privatisation of anything, I want to comment not on British Energy, but on the privatisation of energy companies, because there is an analogy there that may be of interest in the case of Royal Mail.
As we all know, the previous Government privatised the state-owned energy companies, and there was to be competition between all those companies. The number of companies has, however, progressively shrunk to the point where there are now the big six that basically control all energy within the United Kingdom. Of the big six, only two are now based in the United Kingdom—Scottish and Southern Energy and British Gas. All the others have become subsidiaries, in one way or another, of big foreign-owned multinationals, whether that is EDF, Iberdrola or whichever.
Hon. Members may remember that in hard winters in previous years—I am sure that if we have a hard winter this year, it will happen again—concerns have been raised about the way that some of those companies operate vis-à-vis the energy supplied on the continent and the energy supplied within the UK and about whether they are, in fact, giving a better deal to continental customers.
My particular concern—I remember this from my time on the Business and Enterprise Committee and Energy and Climate Change Committee—is the operation of the interconnectors, because the energy system within the UK and the continent depends on those interconnectors, through which, in theory, if the market is working properly, energy flows one way or the other depending on price. The evidence from previous hard winters in the UK, however, is that that has not happened, because even though the price is higher in the UK, the energy is still flowing the other way. That has raised concerns about whether foreign-owned companies are giving due weight to the interests of consumers in the UK. I do not want to try your patience, Mr Hood, and go on too long about energy, but the question is, if a company is foreign-owned, whether the interests of UK consumers will be adequately protected.
My view is that Royal Mail is part of our national infrastructure and cannot be looked at as just another company to be sold off on the stock exchange or otherwise. If control is not retained within the UK, the interests of UK consumers may be diminished. That is important because, as the hon. Member for Ochil and South Perthshire rightly said, the universal service obligation, which is a political obligation imposed by Parliament, is vital to businesses within particular rural areas. Later, I am sure we will talk a great deal about the universal service obligation, on which I have comments to make.
The point, however, is that Government Members talk about choice and competition when the reality is that in rural Scotland—I am sure it is the same in rural parts of England and Wales—there is no competition. Royal Mail has the only people who will deliver. My concern is not ideological, about who owns Royal Mail, but about what services will be delivered to rural areas.

Gordon Banks: To elaborate on what I think the hon. Gentleman was saying, and I think I agree: Royal Mail is currently the only service deliverer, and there is no likelihood of anyone else coming into the market to cover parts, or all, of our constituencies, when they can cherry-pick and take the best parts of the business. That would put his constituents’ businesses at a significant disadvantage compared with others throughout the UK.

Michael Weir: Although the hon. Gentleman is entirely correct, it is actually worse than that. To use my constituency as an analogy, the main road from Dundee to Aberdeen passes through the centre of it. I guess that what will happen is that communities on that main road will get the service, because Aberdeen and Dundee are reasonable markets. A service provider may well decide to deliver to Dundee and Aberdeen and stop off in one or two places on the way, such as Forfar, Brechin and Stonehaven—who knows? Or they may go straight past, because they want to; we do not know that. I can guarantee, however, that villages such as Tarsfide or Glen Clova will not get a service, because they will have to go an hour off the main road to get anywhere near such places, and that is just not going to happen. The reality is that there will not be choice there—as there is not now, to a great extent.
An analogy is perhaps with the parcel service, which has been fully liberalised for many years. Look at adverts in any magazine for delivery of goods by post and there is a little bit at the bottom that says, for example, “This does not apply to the highlands and islands of Scotland.” Couriers will not deliver there, or will only do so at a very high price. My fear is not so much about the personal letter market; it is about the small package market, which is the important thing for small businesses in my constituency. The universal service is so important because such businesses need to be able to receive and send small packages to keep their businesses going, and I worry that that is not going to happen.
The point about the universal service is well made, but there are also serious concerns about control of the business. I support what the hon. Gentleman has said, but I do not think his proposal is perfect, because it needs more thought. The direction of travel, however, is certainly something I would support.

Karl Turner: I rise to speak in support of amendment 16, as tabled by my hon. Friends.
I do not intend to take up too much time, not least because I am well aware that some members of the Committee are finding it difficult to concentrate—I hope, however, that hon. Members will indulge me a little. I understand that one hon. Member on this Committee finds it very dull and, rather than listening intently to the debate as I am, they are intent instead on tweeting their thoughts. We all know what the Prime Minister has said about what too many tweets might make. On a serious note, I am sure that employees, users and potential investors, whose long-term futures are very much at the heart of what Opposition Members are focused on, will share the Prime Ministers sentiments about tweeting, at least during this Committee.
I will now speak to the amendment, if only to help me achieve a better understanding of it. Paragraph (a) would allow at least one employee in the privatised Royal Mail or its successors to sit on the board of the new company. The inclusion of such a representative would allow for a close working relationship between the board and the employees. It would allow employees a point of view and provide them with an opportunity to ensure that any concerns they may have would be heard. That could only serve to strengthen the company, as my hon. Friend the Member for Ochil and South Perthshire has suggested. It also fits in well with the Government’s mantra that we are all in this together. I am obliged to my hon. Friend for reminding the Committee of Richard Hooper’s evidence, because it had slipped my mind. Mr Hooper responded to a question from the hon. Member for Bedford by suggesting that the situation in Post Danmark, which has a union representative on its board, works very well.
Paragraph (b) would require the headquarters of the new business to be located in the UK. I do not see why any member of the Committee would not want to ensure that. It would surely be a good thing for all concerned. It is a real prospect that the potential purchaser will be an overseas company, so the amendment would protect the integrity of Royal Mail. My hon. Friend was right to say that the amendment will also help to protect management jobs. That is an important point. Not agreeing to the amendment would send a message that the Government do not care whether Royal Mail resides in the UK and that they are not concerned about its identity. Indeed, it contradicts the assertion that we are all in this together.
Paragraph (c) provides a safeguard that would require the Secretary of State’s approval before future owners could relocate the headquarters outside the UK, once it is up and running. The provision would give Parliament the opportunity to question the Secretary of State on any of the company’s relocation plans, and it would offer proper accountability to the electorate. Again, that certainly relates to the proposition that we are all in this together.
It would be sensible to undertake a consultation exercise, as proposed by paragraph (d). It would allow for informed comment on the proposals and, as my hon. Friend rightly says, the Secretary of State would benefit from the consultation process. It would serve to improve things.
The restriction that paragraph (e) would place on the Secretary State would be beneficial, because it would mean that the work force were in favour of any agreement reached between them and the Secretary of State. It would help to secure and strengthen the relationship between management and staff.
Paragraph (f) would require the Secretary of State to present to Parliament
“a bill which confers on the Secretary of State the power to dispose of the business”
after he had consulted the work force and secured their approval. That would allow for further scrutiny by Parliament and, of course, goes much further than simply requiring the Secretary of State to
“lay before Parliament a report on the proposed disposal.”
Amendment 16 simply provides for greater inclusion of interested parties and allows for better accountability. I cannot see any reason why the Minister would not want that to happen; it would be of assistance. I hope that I have been able to keep the attention of Committee members in this very short speech. Also, I hope that I have helped to reiterate the concerns of the hon. Member for Angus. For the reasons given, I urge hon. Members to support amendment.

Nia Griffith: I hope that Committee members will excuse me if I have to stop to cough; I will try not to. I hope that we will manage to get through this, because these are important amendments.
Amendment 16 is obviously very detailed. We have heard a lot already from my hon. Friend the Member for Ochil and South Perthshire, and I do not wish to repeat everything that he said. I would like to start with the issue of directly electing board members from those who are directly employed, as my hon. Friend has suggested. Obviously, it is a sound and practical suggestion, but it is certainly not a new idea; it is not even a revolutionary idea or just the preserve of socialism—a word that is hurled across the Chamber as if it were some form of insult, whereas socialism is about fairness, justice and treating people well.
We have known for many years about many successful examples of good collaboration between management and boards. Sometimes people have patronising ways of speaking about employees on boards, in the same way that they have patronising views about young people being on governing bodies or about primary school children taking part in interviews for members of staff. I assure Committee members that in the work I have done in schools and with youth clubs, the young people are usually very perceptive and extremely sophisticated in how they approach the work. The same is obviously true of employees; they have tremendous experience and understanding of what makes the company tick, and they can bring that huge wealth of knowledge and networking to the board.
Employees are vital to improving industrial relations, which, as we have heard, are already improving. We had glowing reports about how industrial relations have improved from Donald Brydon, the chairman, union representatives such as Dave Ward, the deputy secretary of the Communication Workers Union, and from Hooper himself. The idea of total privatisation will be a terribly difficult step for many members of the work force.

Gordon Banks: It is worth putting on record again that when we were drafting the amendment, we bore in mind the fact that work force and management relations are fundamental going into this uncharted territory in which the work force may find themselves. Paragraph (a) strengthens the Bill; it is lacking now, and to preserve the good work force and management relationship there is no alternative other than to approve paragraph (a).

Nia Griffith: I agree. My hon. Friend has taken the words out of my mouth. Having the full confidence of the work force and the work force’s involvement in every possible way are obviously important at this time of change, because—let us be honest—if we want a successful Royal Mail, the work force have to be fully engaged. They are the ones who will make it successful and who have a vested interest in it being successful.
What are the advantages of having the work force on the board? The first advantage is transparency. For far too long, people have had the idea that there is a terrible secret plot against them, that there is determination on the part of management to make everything as difficult as possible for employees, and that the board in particular has a number of secrets it does not wish to divulge. We talk a lot nowadays about the need for transparency, and having employee representation on the board gives that transparency.
Having the work force on the board is also important for communication. If there are messages to come down through the company, communication is vital. We know there are often difficult decisions to be taken, and it useful to share those discussions with employee representatives, so that they can see what the challenges are. They can see why difficult decisions have to be made and why the choices are not very nice.

Gordon Banks: We are talking in this Committee about a communications company. Should a communications company not have the best possible chain of communications from its management to its work force?

Nia Griffith: It would be ironic if it did not have that, as it is crucial. However, communication in the work force is never easy. Trust, communication and transparency are difficult to give tick-box answers to on a performance management sheet, but they are vital qualities. If one evaluates what is going on in any company, poor communication nearly always leads to poor performance and results. Whereas, good communication can build up those vital industrial relations that make a successful company. Those qualities are almost impossible to quantify, but they are crucial in the running of any successful modern business.
I shall move on to the topic in paragraph (b) of headquarters in the UK. The National Federation of SubPostmasters is adamant about that. Woe betide any politician who ignores the National Federation of SubPostmasters. It gets its feedback from a wonderful network of sub-postmasters across the country, because the post office is the hub of gossip and the place where everything that happens in the local community is known. If the Government are interested in putting more business into the post offices, instead of employing expensive consultants, they could use the vast network of sub-postmasters, which would provide a clear picture of what is happening on the street. They will put the politician back in touch with what is happening out there.
When I have been on the doorstep or in my local post office, what is the talk? We all know the usual political issues, but how many times have we heard, “This country is being sold to foreigners all the time”? People are convinced that we have sold things here, there and everywhere. It is bad enough with private companies, when we see British Steel become Corus and then Tata. We see familiar names such as Morris Motors metamorphose into such things as ThyssenKruppTallent and Calsonic Kansei, to give just a couple of examples. People feel aghast, but that is nothing compared to how they feel about the energy companies. The fact that E.ON and EDF are taking over energy companies is brought up time and again in that local post office and on the doorstep. In Wales, the fact that a French company is now running the tolls on the Severn road bridge, between England and Wales, is brought up again and again. How is it that a French company is benefiting from that?

Edward Davey: It is interesting to hear about the gossips in the post offices and how they are helping our debates. We should always listen to what our constituents are saying. Does the hon. Lady ever hear people objecting in such conversations to British companies investing abroad?

Nia Griffith: The Minister is correct that people do not usually do so, but it is an emotional topic. People do not object to British companies investing abroad, but they feel strongly when they see EDF and E.ON on their electricity bills, and they see their toll bridge being run by the French. In addition, it is unbelievable for people in Carmarthenshire that in a country with lush grass, a mild climate and the most wonderful dairy herds in the world, we might even have French milk.

Gordon Banks: The Minister’s intervention was entirely to the point, but my hon. Friend’s comments indicate that our constituents do not often see the overseas investment that UK companies are making. They see what is happening on their doorsteps, however.

Nia Griffith: Returning to Royal Mail, it is one step too far. Most people do not want to see Royal Mail in foreign hands. Some good arguments have been made today to that effect, and I will make a couple more. People always have a tremendous trust in the security and the integrity of the post. They know that their postman or postwoman will not indulge in identity fraud, and they know that their details will not be sold to anybody. They are worried that if a company is not based in the UK, there may be ulterior motives, which is a particular concern with Royal Mail.

Tom Blenkinsop: Is it possible that a foreign company that purchased Royal Mail might liquidate assets from Royal Mail in order to keep prices cheaper in another country where it also provides a service?

Nia Griffith: My hon. Friend makes a good point, and that is a considerable worry. People feel that it is the British who are giving and others around the world who are gaining. They are worried about a precious national asset being used to prop up businesses elsewhere. Having spoken about paragraph (b), paragraph (c) follows logically; if Royal Mail is to have a headquarters in this country, people would like it to remain here. They do not want to see it whisked abroad five minutes after the Secretary of State has relinquished control.
Those points are important for confidence, which is vital to future success. People feel strongly that Royal Mail should remain in the UK. It would be ironic if we were to have a royal wedding with a Royal Mail that had been privatised and was being run from a foreign part. That would be the ultimate irony.
Paragraph (d) is about consultation with employees, which is important. As the hon. Member for Angus has pointed out, it is about ensuring that the employees not only of Royal Mail, which will be privatised if the Bill becomes law, but of the whole Royal Mail group have their say. It is all very well to say that they had their say in Hooper, but this is a Bill. Circumstances are different, and a little more detail has been provided—nothing like enough detail for many of us, because many questions remain unanswered—but it is nevertheless a significant step forward from Hooper. A case can be made for further consultation, and such a major step as separating Post Office Ltd and Royal Mail deserves full and thorough consultation.
I will now discuss paragraph (e), which is all about the importance of democracy. Nobody in the room could possibly deny that a 51% majority is vital to show what the work force want in a yes-no situation. The Minister may remember that the AV vote is all about showing that an MP has the confidence of their constituents, by having more than 50% of them agreeing that the MP is better than the other candidates. It will be interesting to see how the AV vote goes next year. In my constituency, we shall—as people in Scotland will —be knocking on doors and saying, “First off, I would like to introduce you to our candidate in this election and tell you a little about him. Then, I would like to tell you about the list system. Yes, that’s the one where there are four of them standing, but only one cross on the paper.” They might respond, “That’s the one where the losers get the prize, isn’t it?” I would reply, “Well, yes, actually, it is the one where the losers get the prize. You’ve got the system.”

Gordon Banks: I take it that my hon. Friend is not advocating that we should have an AV system to determine the outcome of the ballot in paragraph (e).

Nia Griffith: The difficulty next May will be that not only will we have our first-past-the-post constituency Assembly Member election—similar things will happen in Scotland—but we will also have this wonderful list system, which needs three pages of calculations for someone to understand how the one that they did not vote for got elected.

Jimmy Hood: Order. I think that I am giving the hon. Lady too much hope. I invite her to return to the amendment.

Nia Griffith: By the time one has explained the alternative vote, constituents do not want to listen to another word. I return to the fundamental issue that a 51% majority is a basic democratic principle. It will give confidence to the company that people are behind its privatisation and that it has their confidence and support in making it a successful company. That vote would be extremely useful.
Paragraph (f) addresses why we want to have detail about the universal service provision. Many hon. Members have spoken about this already, and they will return to it later. One of the difficulties of rural communities is that not only are they a long way away—if they did not have the universal service provision, or if the costs were higher, it would be difficult for them to function—but it is difficult for them to attract the inward investment of large companies that need to transport goods a long way. The argument is that the companies always want to be nearer to their markets. The advent of the internet has been a tremendous boost to those of us in the more far flung corners of the UK.

Tom Blenkinsop: Is it not also the case that this paragraph of the amendment is important because rural communities, especially if they are not covered by a local enterprise partnership—that is some 40% of the country currently—will not have the necessary organisation to get in contact with the regional growth fund? They will therefore not be able to access funds for developing their business, for example, if they are an e-mail business that exports goods.

Nia Griffith: My hon. Friend is absolutely right that there are considerable problems.

The Chairman adjourned the Committee without Question put (Standing Order No. 88).

Adjourned till this day at One o’clock.